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Tata Starbucks writes to landlords seeking three-month rent waiver: Report

The coffee chain wants to reduce fixed operating expenses till consumption in the sector improves

April 07, 2020 / 09:50 AM IST

Tata Starbucks has requested landlords of its 185 outlets for three-months of rent waiver amid the countrywide lockdown to tackle the spread of coronavirus (COVID-19) pandemic.

As per a report by The Economic Times, the coffee chain sent letters to the landlords for rent waiver. It wants to reduce operating expenses for the period where customer footfall is affected by the pandemic.

Moneycontrol could not independently verify the report.

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The letter expressed Tata Sons' inability to “bear rent and maintenance charges in light of the current situation” and asked for a 3-month waiver starting March 1.

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“The only way to survive this crisis is by drastically reducing our fixed operating expenses in the immediate term till the consumption in the sector improves,” it said.

The company said that future terms can be reassessed, depending on improvement, noting that it has already paid dues for March, and hence the amount be adjusted against future obligations, said the report.

Tata Starbucks did not respond to queries as per the report.

Experts feel that if the landlords disagree, Tata Starbucks may invoke the force majeure clause, similar to how Speciality Restaurants, Jubilant Foodworks (Domino’s Pizza) and McDonald’s have done. Force majeure is when unforeseeable event(s), beyond control of the concerned parties, prevent fulfilment of a contract.

The landlords, however, as per the report said that Starbucks’ lease agreement does not provide for a waiver.

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Moneycontrol News
first published: Apr 7, 2020 09:50 am

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